AMN Healthcare Services (NYSE: AMN)
Quality Value Investing Research Report | $AMN Updated Coverage | June 2024
Summary:
AMN Healthcare Services, Inc. is a non-dividend-paying small-cap stock in the health care sector’s services industry.
A narrow economic moat surrounds a compelling business model in the context of the health care sector’s prominence in 21st Century America.
However, the company’s enterprise and share price downside risks each rate above average, and analyzing its current wealth and present value produces mixed results.
In this updated research report, QVI reiterates its coverage rating of AMN Healthcare Services and its stock in the Expanded Real-Time Stock Picks.
When referencing this research report, access your Quality Value Investing (QVI) Glossary of Investing Terms and Metric Targets and Research Report Format Guide. Unless noted, all data presented is sourced from Seeking Alpha Premium as of the market close on June 17, 2024, and intended for illustration only.
In this updated coverage QVI Research Report, we’ll reexamine the Expanded Real-Time Stock Picks health care sector holding, AMN Healthcare Services, Inc., to see if it continues to meet Quality Value Investing’s criteria based on our checklist analysis of the business’s current wealth and the share price’s present value.
AMN Healthcare | Company Current Wealth
Value Proposition
AMN Healthcare Services, Inc. AMN 0.00%↑ is a non-dividend-paying small-cap stock in the healthcare sector’s services industry. It was added to the QVI Real-Time Stock Picks on March 22, 2022, at $105.54 cost basis per share.
AMN Healthcare Services, Inc. provides healthcare workforce solutions and staffing services to healthcare facilities in the United States. It operates through three segments: Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions.
The Nurse and Allied Solutions segment offers travel nurse staffing, labor disruption staffing, local staffing, international nurse and allied permanent placement, and allied staffing solutions.
The Physician and Leadership Solutions segment provides locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement solutions.
The Technology and Workforce Solutions segment offers language services, vendor management systems, workforce optimization, and outsourced solutions.
AMN Healthcare Services, Inc. was founded in 1985 and is headquartered in Dallas, Texas, USA.
Economic Moat
Morningstar assigns AMN Healthcare Services a narrow moat rating weighted toward its network effects, such as exclusivity agreements with its clients.
QVI’s Value Proposition Elevator Pitch for AMN:
AMN Healthcare Services is a compelling professional medical workforce solutions provider that should prevail in the aging baby boomer, healthcare-dominated 21st Century.
QVI’s value proposition rating for AMN Healthcare Services: Bullish.
Returns on Management
Revenue Growth and Net Profit Margin
Per the chart below, AMN Healthcare Services’ trailing three-year annualized revenue growth was double-digit positive, outperforming the health care sector’s +7.21% median growth. The company’s topline growth was negative -27.67 for the most recently reported twelve months.
Farther down the income statement, AMN Healthcare Services’ three-year, mid-single-digits positive net profit margin outperformed the sector’s negative median net margin of -4.22%.
Returns on Equity and Invested Capital
AMN Healthcare Services senior management produced a three-year double-digit return on equity, or ROE, twice QVI’s targeted threshold and trounced the sector’s negative median ROE of -39.44%.
Stock buyback programs often elevate ROE. For example, since 2016, AMN Healthcare Services repurchased $1.1 billion of its outstanding shares. Are they buying back shares at a value price for shareholders? The valuation section later in this report will address that question.
AMN Healthcare Services’ three-year return on invested capital, or ROIC, was above QVI’s threshold and the sector’s negative median ROIC of -27.36%. In addition, AMN’s ROIC exceeded its weighted average cost of capital, or WACC, of 5.34%, demonstrating that its senior executives are outstanding capital allocators. (Source of WACC: GuruFocus)
QVI’s business fundamentals rating for AMN Healthcare Services: Bullish.
Next, we’ll look at the company’s returns on management chart, enterprise downsize risks, the stock price’s present value, share price downside risks, and the investment thesis, each exclusive to Quality Value Investing’s premium (paying) subscribers.
Disclosure: At the time of this writing, I/we had no beneficial position in AMN common shares in our family portfolio. I wrote this report myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post.
Additional Disclosure: Quality Value Investing by David J. Waldron’s primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, i.e., not tailored to individual needs nor intended for portfolio construction beyond his family portfolio, which is presented solely for educational purposes. David is an individual investor and author, not an investment adviser. Readers should always engage in their own research or due diligence and consider (as appropriate) consulting a fee-only certified financial planner, licensed discount broker/dealer, flat fee registered investment adviser, certified public accountant, or specialized attorney before making any investment, income tax, or estate planning decisions.